That's the Telser argument, pretty much. The counter to it is that an alternative policy for Chrysler is to raise the invoice price (to prevent dealers from competing down the price) and then rebate the amount of the raise back to dealerships for use in spiffery. They don't have to give the dealership profits by selling them cars at cheap invoice prices, which also risks the dealers simply enjoying high incomes instead of using the higher profits to spiff up the dealership.

The bankruptcy court entered an order today that allows the debtor to reject more than 700 dealership agreements, effective today. The order includes the following slightly odd finding: To the extent that any Dealer Laws conflict with the terms of this Order or the impact of the rejection of the...

You are quite right that while Posner is a conservative in the broad sense of being realistic in his view of the world and scornful of the conventional wisdom he is not conservative literally or temperamentally. I think he'd agree with that.
On the other hand, while his critique of conservatism isn't a critique from within, we should of course take it seriously-- perhaps more seriously, as coming from a balanced outsider. If he finds nothing of interest in Catholic Social Thought, either (a) he hasn't read it seriously (quite possible), or (b) CST people ought to worry about that.
I tend to think that he's right and that Traditionalism needs some revitalization. Russell Kirk and William F. Buckley are gone now, and most of the energy-- if not the political potential, actual belief, or scholarly potential-- is with the libertarians.
Come to think of it, although the libertarians have energy and optimism, I don't get a sense there's much in the way of vigor in exposition of ideas either. Perhaps it'sa problem of lack of public intellectuals generally.

Richard Posner blogs on what he calls "the intellectual decline of conservatism," which prompts some gleeful ruminations from Yglesias. The trouble with this (and it's a trope that's bound to be repeated elsewhere on the left) is Yglesias' claim that Posner is "definitely a political conservativ...